The Ultimate Guide to Downsizing

As you approach retirement age, life is full of transitions. Your adult children grow up and move out on their own. You prepare to say goodbye to full-time work for good. And if you’re like many baby boomers, you may also think about downsizing your home.

According to a report from Zillow Group, 24% of recent home buyers were age 60 or older – a 47% increase from 10 years earlier. For nearly half of these older adults re-entering the housing market, downsizing was a primary motivation.

What is Downsizing?

When it comes to real estate, the term downsizing is pretty self explanatory. It means moving to a home that’s smaller than your current residence.

But for those starting their downsizing journey, finding a house, apartment or condo with less square footage is just the beginning. That’s because one major implication of moving to a smaller home is having less space to store all the things you’ve accumulated over the past few decades.

When is the Right Time to Downsize?

Choosing to downsize your home is a deeply personal choice – one that comes with major lifestyle implications. But there are several signs that it may be a good time to make a move.

  • Unused space. When your family was growing, all those bedrooms and bathrooms were an absolute necessity. But as an empty nester, you may find your home is bigger than what you need. If you have lots of space that is unused on a daily basis, downsizing can be a great choice.
  • Decreased mobility. As you age, homes with stairs, narrow hallways and small bathrooms can become difficult to navigate. Downsizing provides an opportunity to move into a single-floor house with universal design features – meaning you’ll have a safe, accessible space to spend the coming years.
  • Change in income. When you decide to retire, you’ll have to adjust to a new financial picture. Moving into a smaller home often translates to smaller bills, which can be helpful if your savings and retirement benefits don’t quite replace your full-time income.
  • Desire to relocate. Do you want to spend more time with your grandkids who live in another state? Or trade those cold northern winters for the Florida sun? Retiring in a new city can serve as an occasion to downsize in the process.

What are the Advantages of Downsizing?

Here are some reasons why you may want to downsize your home.

  • Access to equity. Real estate prices are at all-time highs in many cities across the country. If you’ve owned your current home for any length of time, you can cash out all that home equity when you sell. Because you’re buying a smaller home, you may end up with no mortgage at all (and cash to spare).
  • Lower bills. Smaller homes use less energy. That means lower gas, electric and water bills – something you’ll appreciate as you enter retirement.
  • Less maintenance. With a smaller home, there’s less space to clean, dust and vacuum. A smaller yard will save you hours of mowing and landscaping in the summer. And if you move into a condo or apartment, you’ll have no outside maintenance at all.
  • More accessibility. When you downsize, you’ll have the option to choose a home that’s handicap accessible. While you may not need it now, it’s a feature you’ll likely appreciate in the years to come.

What are the Disadvantages of Downsizing?

While downsizing can be a great option for older adults, there are still some cons to consider.

  • Home availability. In a seller’s market, the same factors that make it a great time to list your home can make it difficult to find a new one. With tight home inventories, you may have less options to choose from when searching for a new home – and the ones you do find may sell quickly.
  • Adjusting to small spaces. When you’re used to a large home, adjusting to life with less room can be difficult. For this reason, just the thought of downsizing makes many people hesitant to move.
  • Leaving memories behind. Your current home is filled with memories. It may be where you raised a family and watched your kids grow up. And leaving it all behind can take an emotional toll. The same can be true for purging many of the possessions you’ve collected over the years.
  • Moving costs. While transitioning to a smaller home will likely produce long-term savings, the process of moving results in lots of upfront expenses. You’ll need to have enough cash saved for things like closing costs, home repairs and hiring movers – just to name a few.

How to Prepare for Downsizing

Ready to downsize your home? Take these steps to prepare before moving into your new living space.

  • Fix up your home. If you’ve lived in your current home for any length of time, it probably needs a little TLC before you list it for sale. So fix that leaky faucet, add a fresh coat of paint and look for other improvements you can make to boost your home’s resale value.
  • Declutter. With less space in your new home, you’ll want to start going through your possessions as soon as possible. Keep the items you need and use frequently, then donate, sell or give away the rest. Organization experts recommend getting rid of duplicate items, as well as anything you haven’t used within the past year or two. If you have any collections, consider keeping a few of your favorite items and parting ways with the rest.
  • Limit legacy gifts. You’ve saved boxes of keepsakes, memories and family heirlooms to pass on to the next generation. But how many of them will your children actually want (or keep when you’re gone)? To avoid over-saving, talk to your family members about the gifts you’d like to leave behind one day. Digitize your photo albums. And if your daughter wants great-grandma’s cuckoo clock or fine china, consider giving those legacy gifts early. In doing so, your family can start enjoying your treasured items right away, and you’ll have one less thing to pack for your move.
  • Measure your furniture. You know how furniture always looks smaller before you take it home from the store? That same principle will apply to your downsizing journey. In large rooms, you may underestimate the size of large items like couches, tables and dressers. Take measurements in advance to make sure they’ll fit in your new home. If anything will be too big, try to sell or donate it before your move and replace it with a smaller item.
  • Call your insurance agent. Before pulling the trigger on your new place, it’s always smart to give your Erie Insurance agent a call. Your local agent can give you an idea of how your move could change the level of homeowners insurance you need, and how much you’ll pay in premiums. And remember that unlike other utilities, moving to a smaller home doesn’t always result in a smaller homeowners insurance bill. That’s because there are lots of factors that go into determining how much homeowners insurance costs, including the age, location and condition of your home, and other personal information.

Find the Right Balance

Downsizing is a big decision and like any big decision, it’s important to find the right balance. When it comes to homeowners insurance coverage, you can count on our local, independent agents to help you make good decisions about your insurance protection. Get in touch with an ERIE agent today. Our agents are knowledgeable, caring people you can rely on. They’ll make sure you have the protection that you want and need – all at the right price.

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of July 2022 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.


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